Coal economy a dead end for Illinois

In 1911 the Peabody family moved into a new mansion in a suburb of Chicago. The move was made possible by many Peabody company miners living in shacks and risking their lives in unsafe mines downstate.

Unions gradually improved conditions and pay for miners but the basic economic dynamics of coal haven’t changed. Mining communities get deadly jobs, poisoned water and stripmined land that can’t be used again, while most of the energy and wealth created by mining activity is sent far away. It’s no coincidence that West Virginia, eastern Kentucky, southern Illinois and any other area that bases its economy on coal mining remains in long-term poverty. The nature of economies dependent on mineral extraction is to export wealth away, not spread it locally.

This exploitative dynamic continues in Illinois even as the new energy economy provides promising avenues for job growth. A report by the group Environmental Entrepreneurs tracked green job growth in Illinois during the first quarter of 2013. All new green jobs were in the northern half of the state. That’s no coincidence.

Historical tradition contributes to much of downstate Illinois focusing on a coal-based economy rather than attracting clean energy jobs. But perhaps more important in keeping downstate hooked on coal is the Illinois Office of Coal Development overseen by the Department of Commerce and Economic Opportunity.

The OCD directs millions of taxpayer subsidies annually toward the coal industry while working to convince economic development bodies and elected officials that coal is a clean, cheap power source that creates plenty of jobs. That’s completely untrue, of course.

If you live in Chatham, belong to Auburn’s Rural Electric Convenience Co-op or the Shelby Electric co-op, you received a letter last year informing you of a large rate increase. The letter may not have told you why. They were among more than 200 municipalities and co-ops forced to raise rates up to 30 percent because they invested in Peabody’s Prairie State Coal Plant near Marissa, Ill.

When Peabody found it difficult to find private investors for Prairie State, they targeted co-ops and small towns with promises of clean, low-cost energy. Then construction costs rose higher than expected and so did the price of power generated by the plant. Some towns are now suing Peabody to escape even larger rate increases.

Why was it easy for Peabody to convince so many public officials that Prairie State would be a secure investment for low-cost energy? One reason may be the tax dollars spent by the Office of Coal Development to convince everyone it’s true. The office spent years promoting Prairie State to public officials and subsidized its construction. Now Peabody will reap the profits while many towns struggle to pick up the tab.

Although the Department of Commerce and Economic Opportunity promotes green jobs in the new energy economy, the Office of Coal Development keeps downstate officials disproportionately focused on nostalgia for old coal jobs. The empty promise of reviving coal led to disappointment in Mt. Vernon, Mattoon and Taylorville. The state wasted tens of millions in direct payments and offered tax breaks to subsidize “clean coal” plants proposed in those communities that never materialized.

“Clean coal” pipe dreams squandered years of effort and money that could have been used to attract green jobs to communities that badly need them. Now, even extreme coal boosters like Congressman John Shimkus, who supported the projects, admit carbon sequestration isn’t economically viable or ready for large-scale deployment.

Subsidizing coal may have had some economic benefit at one time. Today, it’s an albatross that raises energy prices, discourages rural communities from seeking more realistic job creation strategies, and marginally prolongs the necessary decline of America’s deadliest power source. It’s time to retire the Office of Coal Development.

Will Reynolds of Springfield blogs on Illinois environmental politics at www.thereisaway.us.